Commercial Litigation and Arbitration

Removal — Fraudulent Joinder — Settlement Communications Subject to Rule 408 May Be Considered to Determine Whether Parties Properly Joined

King v. Pfizer, Inc., 2013 U.S. Dist. LEXIS 181702 (D. Neb. Nov. 26, 2013):

This matter is before the court on the plaintiffs', Cathy and Steve King (Kings), Motion to Remand (Filing No. 22). ***

On September 17, 2013, the pharmaceutical defendants removed this action from the District Court of Lancaster County, Nebraska, to the United States District Court for the District of Nebraska.... The pharmaceutical defendants allege this action is removable pursuant to 28 U.S.C. § 1332 because the amount in controversy exceeds $75,000 and there is complete diversity of citizenship between the parties, after the court excludes the fraudulently joined non-diverse defendant physician.... On October 25, 2013, the Kings filed the instant motion to remand arguing this court lacks jurisdiction pursuant to 28 U.S.C. § 1447(c).... For the reasons set forth below, the undersigned magistrate judge recommends the Kings' motion to remand be denied and Monte M. Scott, M.D. (Dr. Scott), be dismissed.***

The Kings allege Cathy King suffered injuries as a result of ingesting the prescription drug  metoclopramide hydrochloride (metoclopramide), a medication for treatment of symptomatic gastroesophageal reflux and diabetic gastric stasis.***

The Kings allege two causes of action: personal injury and loss of consortium.... The Kings assert six theories of recovery in support of their personal injury claim: product liability, conscious misrepresentation, negligent misrepresentation, fraud and fraudulent concealment, negligent failure to provide adequate warnings, and failure to obtain informed consent. Id. 4 Generally, the Kings allege pharmaceutical manufacturers of metoclopramide negligently, intentionally, and recklessly misinformed and falsely represented to prescribing physicians the dangerous negative side-effects of long-term use of Reglan®/metoclopramide. Id. Between 1988 and 2005, Cathy King's physicians, including Dr. Scott, prescribed Cathy King metoclopramide tablets, syrup, and injections for treatment of her gastrointestinal problems. Id. ¶ 41. As a result, Cathy King alleges she suffered and continues to suffer from tardive dyskinesia and tardive akathisia.

Footnote 5.     The Kings represent tardive dyskinesia is "a serious, sometimes disabling, largely untreatable, and potentially irreversible drug-induced affliction involving involuntary movements of the torso, neck, head, mouth, lips, tongue, and/or limbs" and tardive akathisia is "drug-induced anxiety and inner restlessness which can cause suicidal ideation and suicide." ***

***The Kings allege that in 2009, the Federal Drug Administration (FDA) "publicly announced that use of [metoclopramide] for longer than 12 weeks in duration should be avoided in all but those rare cases where therapeutic benefit could be thought to outweigh the risk of developing tardive dyskinesia[.]" *** The Kings allege "scientific researchers familiar with the use and effects of [metoclopramide knew] these drugs are associated, probably causally, [with], inter alia, tardive dyskinesia, tardive dystonia, acute dystonic reactions, akathisia, tardive akathisia, and Parkinsonlike symptoms." ***

The Kings allege Dr. Scott and other physicians "were dangerously misinformed and under-informed about the effects of metoclopramide use on the central nervous system of the human body." Id. ¶¶ 43, 65, 70-71,  [*8] 72, 74, 78. The Kings allege none of the metoclopramide manufacturers provided physicians or the general medical community sufficient information about metoclopramide to enable physicians to prescribe metoclopramide in a reasonably safe manner. Id. ¶ 44; see also 83, 95, 98, 102, 106, 115, 119. Further, the Kings allege none of the metoclopramide manufactures provided physicians any information about tardive dyskinesia or tardive akathisia. Id. ¶ 67. ***

The Kings request monetary compensation for Cathy King's physical injuries, loss of earning capacity, past medical expenses no less than $10,000, permanent mental and physical impairment, loss of consortium, judgment interest, and such other and further relief the court deems just and proper. ***

I. Amount in Controversy

When, as in the instant matter, damages are not fully specified in the state court complaint, the removing parties "ha[ve] the burden of proving that the amount in controversy exceeds the jurisdictional minimum." Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). The pharmaceutical defendants argue the Kings' complaint establishes the Kings' damages exceed the jurisdictional minimum and other courts that have addressed similar matters found the amount in controversy satisfied. See Filing No. 1 - Notice of Removal ¶¶ 35-39 (citing Overton v. Wyeth, Inc., No. 10-0491, 2010 U.S. Dist. LEXIS 145143, 2010 WL 4717048, at *4-5 (S.D. Ala. Oct. 29, 2010)  report and recommendation adopted, 2010 U.S. Dist. LEXIS 120811, 2010 WL 4716972 (S.D. Ala. Nov. 15, 2010) (concluding allegations plaintiff suffered from tardive dyskinesia from ingesting metoclopramide sufficient to establish the amount in controversy exceeded the jurisdictional minimum); Smith v. Wyeth Inc., 488 F. Supp. 2d 625, 630 (W.D. Ky. 2007) (same)). The Kings' complaint indicates Cathy King suffers from and will continue to suffer tardive dyskinesia and tardive akathisia as a result of ingesting metoclopramide two to three times a day between 1988 and 2005, well beyond the recommended twelve-week treatment period. See Filing No. 1-13 - Compl. ¶¶ 40-41, 45. The Kings further allege the diseases have already caused her physical, emotional, and monetary damage, which will likely continue. Id. at 47.  The court finds, due to the alleged extent of the Kings injuries, the Kings' allegations establish the jurisdictionally required amount in controversy. Additionally, in their brief in support of remand, the Kings do not mention or contest the matter in controversy exceeds the sum or value of $75,000. Therefore, the issue remaining before the court is whether Dr. Scott, a non-diverse defendant, is properly joined.

II. Diversity

Before addressing the issue of whether the Kings fraudulently joined Dr. Scott to frustrate federal diversity jurisdiction, the court will consider the admissibility of an email the pharmaceutical defendants rely upon to establish Dr. Scott's fraudulent joinder.

A. Fed. R. Evid. 408

As part of the pharmaceutical defendants' Notice of Removal, the pharmaceutical defendants reference an "Email from Ralph Pittle"  as evidence of the Kings' fraudulent joinder of the non-diverse Dr. Scott.... The Kings argue Fed. R. Evid. 408 precludes consideration of the Pittle email because "[t]he email is unquestionably a communication regarding compromise offers and negotiations." ***

Footnote 7.     The email in question was sent by Ralph Pittle (Mr. Pittle) on June 1, 2013. See Filing No. 1-1 - Pittle email. For simplicity, the court will refer to the email as the Pittle email. All parties refer to Mr. Pittle as the Kings' counsel; however, Mr. Pittle is not named as the Kings' counsel in this matter. See Filing No. 1 - Notice of Removal, Filing No. 23 - Brief, Filing No. 25 - Response. 


In response, the pharmaceutical defendants argue the Pittle email is not for settlement purposes because the email, with the exception of two references to mediation, pertains to litigation strategy, specifically, Mr. Pittle's apparent desire to file claims in state court....   Additionally, the pharmaceutical defendants argue the removal statute does not condition removal on admissible evidence and courts have held settlement demands can be considered for purposes of determining jurisdiction.   Id. (citing Groeneweg v. Flint Hills Res., No. 08-4815, 2008 U.S. Dist. LEXIS 93723, 2008 WL 4951494, at *2 (D. Minn. Nov. 18, 2008) (determining  plaintiff's settlement demand relevant to determination of the amount in controversy)). Further, the pharmaceutical defendants argue Rule 408 does not require exclusion when the evidence is offered for a purpose other than to "'prove or disprove the validity or amount of a disputed claim or to impeach.'" Id. (citing Fed. R. Evid. 408). The pharmaceutical defendants contend Rule 408 does not bar use of the Pittle email to show fraudulent joinder of a non-diverse defendant. Id. at 6-7.

The Pittle email provides:

   From Ralph:

William and Hank: I'm forwarding a link to two folders with proof of use and proof of injury documents for two unfiled cases. The King folder also has a video of Mrs. King. I told Hank when I saw him outside Judge Higbee's conference room last month that in light of Judge Higbee's reluctance to make "Erie predictions" I was planning on filing new cases in state courts with physician defendants in order to get the Conte v. Foster  question

Footnote 8   The pharmaceutical defendants represent Mr. Pittle's reference to "Conte v. Foster" is a reference to the "innovator liability theory" used by a plaintiff to sue brand-name drug manufacturers when the plaintiff only ingested generic drugs....

presented to a number of State Supreme Courts. I'm writing to inquire if you would be interested in mediating these cases before I file. I'm planning on referring the King case to Pete Wegman in Lincoln, Nebraska and referring the Sherman case to Paul Stritmatter in Hoquiam, Washington. I've already spoken with both. Paul and I clerked together on the Washington Supreme Court 42 years ago. Pete and I were friends for many years of the late Harry Philo, past President of ATLA. Diana Shennan's prescribing doctor is Bruce Silverman. I've spoken with Dr. Silverman's counsel about my intentions to file against Dr. Silverman. Dr. Silverman was not aware of the warning that was added in 2004 or the black box warning in 2009. He graduated medical school at about the time that the Robins' speakers panel was telling doctors about the Taylor study. It's my understanding that he was relying on information distributed by Robins in those years and his question through his lawyer was "Why don't they tell us when they add new warnings?" Cathy King's prescribing physician is Dr. Monty Scott. Dr. Scott is 92 years old, but still very alert. He was right in the path of the Robins marketing campaign. I spoke to him long enough to learn the identity of his lawyer but he knows that I believe that your clients are principally responsible for misleading physicians. If the idea of mediating these cases before I file is of interest, let's get a mediation agreement together and I'll send you the rest of the records that I have along with a defense HIPAA and a plaintiff fact sheet. I do need to know one way or the other promptly to avoid any last minute scrambles before statutes expire. Thanks your anticipated courtesy in these matters. Best regards as always.


Assuming a dispute existed at the time Mr. Pittle sent his email,  the court finds the Pittle email is not communication protected under Fed. R. Evid. 408. The Pittle email generally discusses Mr. Pittle's litigation strategy. The Kings have not cited any law supporting their assertion that discussion of litigation strategy, and a desire to mediate, is protected as communication encompassing compromise offers and negotiations. Alternatively, even if the Pittle email is  a settlement communication, Rule 408 does not prohibit this court from considering the Pittle email to determine jurisdictional issues.

Footnote 9.   "Rule 408 only prohibits admitting compromise evidence relating to a 'claim' that was disputed when the settlement negotiations or offer to compromise took place." Weems v. Tyson Foods, Inc., 665 F.3d 958, 965 (8th Cir. 2011). The court has reservations a dispute existed at the time Mr. Pittle sent the email. The court recognizes, as the parties represent, there are numerous cases involving the same counsel and same defendants; however, there is no basis to assume such disputes are imputed to a dispute between the Kings and the defendants solely because counsel for the parties previously, or currently, litigated against each other over the issue of metoclopramide's known and unknown side-effects.

While Rule 408 requires certain exclusions, the rule also provides exceptions: "The court may admit this evidence for another purpose, such as proving a witness's bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution." See Fed. R. Evid. 408(b). The Advisory Committee Notes state the  situations mentioned in the rule are "illustrative" and do not foreclose offering compromise evidence for other purposes. See Fed. R. Evid. 408 advisory committee's notes (as noted in the 1972 Proposed Rules section). The pharmaceutical defendants are not introducing the Pittle email as an admission of liability or to prove or disprove the amount of a disputed claim, but instead are offering the Pittle email to show the Kings have no intention of pursuing their alleged claims against Dr. Scott and only included Dr. Scott to frustrate federal diversity. The court finds the Pittle email is offered for a purpose that falls outside the ambit of Rule 408(a).

Additionally, courts have used compromise offers, negotiations, and settlement demands to establish the amount in controversy required for federal diversity jurisdiction. See McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008) ("[S]ettlement documents] demonstrate plaintiff's own estimation of its claim [and] are a proper means of supporting the allegations in the notice of removal, even though they cannot be used to support the ultimate amount of liability."); Groeneweg, 2008 U.S. Dist. LEXIS 93723, 2008 WL 4951494, at *2; Wang v. Pac. Cycle, Inc., 530 F. Supp. 2d 1048, 1051 (S.D. Iowa 2008) ("As a general matter, settlement demands are relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff's claim." ) (internal quotation omitted). If courts are permitted to consider settlement communications to establish the amount in controversy, as a logical extension, this court is permitted to consider the Pittle email to determine whether the parties are properly joined. Lastly, considering the Pittle email for determining federal diversity jurisdiction does not undermine the purpose of Rule 408, to encourage settlement. Therefore, even assuming Rule 408 applies, the court will consider the Pittle email in determining whether the Kings properly joined Dr. Scott or whether the Kings joined Dr. Scott to frustrate federal diversity jurisdiction.



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